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Preventing Theft/Fraud In The Workplace

Chantelle and I recently attended the NZ Bookkeepers Association Annual Conference for 2017. We had some amazing speakers but one that stood out to me the most was Lynda Smart from Rogers Reidy Chartered Accountants. She spoke to us about preventing fraud and theft in the workplace. It stood out to me because a lot of business owners I know don’t have any prevention of theft in their workplace and most owners just go with trusting their employees. The scary thing is it IS happening out there in the workplace.

Lynda talked about the rationalization employees make while committing theft or fraud in their workplace.

Some of these that employees make are:

  • ‘I will pay it back when I am able to’
  • ‘Everybody is doing it’
  • ‘The owners/management are dishonest as well’
  • ‘I am not paid enough for what I do’
  • ‘They have plenty and can spare it’

She also talked about the ‘Red Flags’ and how you can possibly detect fraud in the business:

  • The company does not seem to be doing as well as it should
  • The company is business than ever, but has less working capital than usual
  • Unexplained drop in gross profit percentages
  • Increased expenditure in certain departments or areas
Some employees who commit theft are the ones that you least expect. Employees who are most likely to commit fraud or theft are:
  • People with gambling, alcohol or drug addiction
  • People who have huge family pressures
  • People who see easy opportunity to do it and get away with it
  • People who are just purely greedy
Common forms of employee theft are:
  • Taking money out of the till
  • Taking home stock
  • Making up fake invoices and paying them
  • Changing bank account numbers for suppliers
  • Taking home stock

There are actions to mininise the risk of this happening in your workplace:

  • Protect the whistle blowers
  • Encourage rotation of duties and sharing of tasks between employees
  • Enforce holidays – A lot of employees who are frauding the business do not want to take holidays because they don’t want anyone checking over their past work
  • Perform regular audits
  • Investigate EVERY incident

Most importantly, the best way to minimize the risk of an employee committing fraud or theft is to get rid of the opportunity for it. Make sure there are steps put in place to make sure it is almost IMPOSSIBLE to commit fraud.

If you think there is something going on in your workplace and want to find out more, visit



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